South Bend owner could lose property in tax sale

Redevelopment Commission wants to buy it, tear it down

Redevelopment Commission wants to buy it, tear it down

October 02, 2006|NANCY J. SULOK

Norbert Toubes thinks his property is worth more than $1 million. South Bend officials are telling him it isn't worth anything. They've been wrangling for a long time now over the value of the former South Bend Lathe plant in the 400 block of West Sample Street. But now the negotiations are coming to a head. Toubes owes $337,000 in back taxes on the vacant property, and it is on the list of properties to be sold Thursday in the county's first tax sale since 2001. He is holding out hope that he can reach an agreement to sell it to South Bend, which wants to tear it down as part of the Studebaker Corridor renewal effort. The Redevelopment Commission has scheduled a special meeting for this afternoon, to give Toubes one last chance to accept its final offer of $660,000, according to Robert Mysliwiec, Toubes' attorney. The city also would assume the delinquent tax burden, making its offer worth $1 million. Toubes, meanwhile, is holding out for $800,000, with the city still paying the taxes. The county has appraised the property at $900,000, Toubes said, and that's what the taxes are based on. City officials warned him on Friday, Mysliwiec said, that if Toubes insists on $800,000, they will cancel the Redevelopment meeting and all bets will be off. That will leave Toubes to take his chances Thursday at the tax sale. The city has indicated it is prepared to bid $400,000 for the property at the sale. Toubes said. If it does, Toubes either will have to outbid that offer or try to redeem the property later. After Thursday's auction, property owners have a year to redeem their property by paying the back taxes plus a 10 percent interest penalty to the purchaser. That means Toubes would be out at least $440,000 if the city buys it and he tries to redeem it. No matter what he does at this point, Toubes said, he will be the loser. He thinks the property is worth a lot more than the city is willing to admit. The building sits on 15 acres just seven blocks from the center of downtown, he noted. That is prime land, he said. On the other hand, the city has noted that it will be liable for environmental cleanup if and when it acquires the property. Toubes claimed there is no pollution from the old South Bend Lathe, but pollution has flowed in its direction from other buildings in the Studebaker Corridor. He said the city estimated it will cost from $800,000 to $6 million to clean it up. Toubes and Mysliwiec were among four property owners in Circuit Court last Wednesday seeking to have their properties removed from the tax sale list. Judge Michael Gotsch ruled against them. He bought South Bend Lathe in the early 1990s for about $6 million, which included the 500,000-square-foot building as well as machines, inventory and other things. He tried to sell the business in 2000 for $1 million and again in 2002 for $1.4 million, but both sales fell through. South Bend Lathe was 94 years old when it ceased production in May 2002 The building, built in 1917, once housed the machine shop of the Studebaker Corp. Toubes said he thinks the city is trying to steal the property from him for much less than it is worth. "I am very, very disappointed," he said. Nancy J. Sulok's columns appear on Sundays, Mondays and Thursdays. You can reach her at nsulok@sbtinfo.com, or by writing c/o South Bend Tribune, 225 W. Colfax Ave., South Bend, IN 46626, telephone (574) 235-6234.